"Staying the course" through the 2000 dot-com bubble paid off just fine. It crashed, then came back up. So far, we don't have to avoid the crashes to make a good return from the stock market... The historical 9%-10% return INCLUDES all the bear markets.Dandy wrote:Or you could listen to Mr. Bogle who also said when the market is extremely overvalued, a rare event, you should consider reducing your equity allocation say from 65% to 50%. During the high valuations around the year 2000 he reduced his allocation from 75 or 80% to 25% partly due to health concerns and partly due to valuations. I think a PE of 50 would be considered "extreme" not to mention a PE of 150.Before succumbing to the lure of market timing, listen to these experts:
Stay the course makes sense most of the time for most people but even Mr. Bogle, who probably coined that phrase, knows there are exceptions to be considered in extreme/unusual times. He is often more flexible than many of his devoted followers.
Do nothing for the past 100 years, and you got 9%... Do something, and you might have gotten more, but you were also more likely to have gotten less.
When did Mr. Bogle get back in by the way? Did he ever change back to 80% stocks? If he never went back to 80% stocks, that changes the story significantly.